Citigroup has issued a research report downgrading CLP HOLDINGS (00002) from "Buy" to "Neutral." The downgrade reflects challenges to the earnings outlook of its overseas operations due to weaker wholesale electricity prices in Australia and reductions in market-based power tariffs in China. However, the bank stated that a "Sell" rating is not warranted, as the company's dividend remains sustainable, supported by its Hong Kong business. Citigroup reduced its net profit forecast for CLP for 2026 to 2028 by 5% to 7% to account for these headwinds in Australia and China. Based on expectations for US interest rate cuts, the bank applied a lower weighted average cost of capital, leading to a 2.6% increase in the target price to HK$78. The report projects a reasonable 2026 dividend yield of 4.4%. Among Hong Kong utilities, Citigroup favors Guangdong Investment (00270) most due to its dividend yield exceeding 6%. The bank also views CK Infrastructure Holdings (01038) and Power Assets Holdings (00006) favorably, citing significant disposal gains from the sale of the UK power network that could be used for future acquisitions.